Clinton Threatens Telecom Reform Veto : Legislation: The White House calls the GOP measure a ‘sweetheart deal’ for major communications companies.

WASHINGTON —  President Clinton threatened Monday to veto a landmark reform of the nation’s telecommunications law, which is headed for a House vote this week, saying the GOP bill would fail to achieve lower consumer prices or greater diversity in the marketplace.

“Instead of promoting investment and competition, it promotes mergers and concentration of power,” Clinton said in a statement issued late Monday.

A White House official termed the GOP bill a “sweetheart deal” for major communications firms, in which Republican lawmakers refused to make any compromises with the Clinton Administration or Democratic leaders in Congress, despite a series of high-level meetings in recent weeks.

While the White House had previously indicated that it was concerned about some aspects of the bill as it moved through Congress, Monday’s statement was the first clear signal that a veto was likely.

Lawmakers have been struggling for years to overhaul the nation’s antiquated telecommunications laws, but pitched battles among the local and long-distance telephone companies, the cable industry, television broadcasters, consumer advocates and many other interest groups have undermined their efforts.

The Senate succeeded in passing a telecom reform bill earlier this year, and a largely similar House version seemed to be on track for passage. But a series of last-minute changes engineered by House speaker Newt Gingrich (R-Ga.) has hurt the fragile consensus that appeared to be carrying the legislation toward passage, and the White House’s opposition further complicates the effort.

Among the most objectionable provisions of the House bill, according to the White House official, was an amendment that would allow a single corporation to control television stations that reach 50% of the market, a doubling of current rules that limit penetration to 25% of the market.

The bill also would drop the current rule that limits a single owner to 12 television stations, a change that would potentially offer the most benefit to Rupert Murdoch’s News Corp., the Administration official said.

The Administration official noted that Murdoch owns 12 stations and holds a minority interest in 17 other stations that would boost his penetration to 40% of the U.S. market if he bought them outright. In an unusual coincidence of timing, Murdoch is due to testify today about the controversial book deal that News Corp. signed with Gingrich, who has played a key role in shaping the bill.

“The very week they are investigating the sweetheart deal for Gingrich, they are giving a sweetheart deal for Murdoch,” the White House official said. “In every fork in the road, they take the turn that results in favoring the monopolies.”

The House Rules Committee is expected to schedule a House debate and vote on the measure today. But even before the White House issued its statement, congressional action on the bill had been slower than expected.

Clinton cited half a dozen other provisions in the bill that he opposes and said he would veto the bill if it is ultimately sent to the White House without major changes, though he was vague on exactly what he would accept.

At least some of the provisions Clinton opposes are also contained in the bill that the Senate passed by an overwhelming 81-to-18 vote in mid-June, culminating a 10-year legislative effort to improve competition in everything from telephone to cable services.

The Senate vote was taken after an amendment frenzy, in which more than 20 last-minute changes left many experts wondering exactly what was approved and creating a problem for reconciling the bill with the ultimate House legislation.

The House Commerce Committee approved a bill that closely parallels the Senate bill, but after it was sent to the House floor Gingrich asked the committee to make amendments that led to Clinton’s opposition.

Clinton also objected to provisions in the House bill that would repeal bans on ownership of both newspapers and broadcasting stations in the same market. In addition, he opposed provisions that would allow the Baby Bells to offer long-distance services before competition develops in local telephone services.